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Las Vegas-style gambling and glitz landed in Massachusetts after decades of debate with the opening of the $1 billion MGM Springfield in 2018 and the $2.6 billion Encore Boston Harbor a year later.
The two large resort-style casinos won approval from state regulators in no small part due to their perceived potential to be engines of economic development.
Steve Crosby, the loquacious Massachusetts Gaming Commission’s chairman for its first few years, made it clear he was looking for the “wow factor” weighing between different casino proposals for the Boston-area casino license, which Wynn Resorts would eventually land.
A late comer to the casino game, the Bay State wasn’t going to settle for just another dreary slots hall of the type that have become a dime a dozen around the country.
Well, the two big casinos certainly made a splash when they opened, capturing headlines and drawing crowds of gamblers.
But hopes that Encore Boston Harbor and MGM Springfield would become magnets for economic development for their often-overlooked working class cities appear now to have been unfounded.
No Big Crime Spikes
That’s my read on the latest in a series of dispassionate reports by researchers from UMass Amherst researchers, who have been studying the impact of the rollout of gambling in Massachusetts, from crime rates and addiction to economic development.
The casino industry has been the subject of often furious debate across the U.S for years now, with supporters claiming all sorts of wonderous economic benefits and revenue, even as puritanical opponents decry casino gambling is akin to strip mining but worse, a predatory destroyer of communities and families.
But a series of reports so far has painted a very different picture. The Social and Economic Impacts of Gambling in Massachusetts (SEIGMA) study has found no evidence of any significant spike in crime around the two casinos and the Plainville slot parlor, or for that matter, big increases in traffic.
Ditto for gambling addiction, which was hardly in short supply in Massachusetts before the casinos opened, with Rhode Island’s Twin River and Connecticut’s Mohegan and Foxwoods casinos a relatively modest drive away.
And don’t forget the Massachusetts State Lottery, with scratch tickets a major issue for many problem betters.
Now the verdict is in for economic development, and the findings are pretty much the same.
The team from the UMass Donahue Institute looked at the commercial real estate market, which they defined very broadly as “all non-residential real estate activity, including the development, leasing, and sale of non-residential buildings and space.”
Translation: We are not just talking about office space in downtown Springfield here.
And it’s what they didn’t find that is key here.
“The presence of the casinos has not dramatically transformed local commercial real estate markets, either for better or for worse – positions that were argued by casino proponents and critics, respectively,” the report notes.
The number of commercial real estate sales rose “substantially” in Springfield over the past decade after the building of the city’s downtown MGM casino was announced, according to a new study.
Some Benefits, However Limited
That doesn’t mean there was zero impact on the commercial real estate market by these two casinos.
The study notes the pair of massive gambling and entertainment palaces potentially strengthened various aspects of the market in Everett and Springfield.
The price per square foot for commercial real estate inventory, adjusted for inflation, rose steadily in the 2010s in Everett.
But here’s a reality check: While the price per square foot did rise significantly in Everett after Encore’s opening, values in the city are still some of the lowest in the area, even compared to Malden and Lynn.
The number of commercial real estate sales rose “substantially” in Springfield over the past decade as well, outpacing the state average and that of surrounding communities.
That said, some of those sales were probably tied to recovery from the 2011 tornado that devastated Springfield’s South End.
Millions in Tax Revenue
But while casinos did not turn either Springfield or Everett into the next Boston or Somerville, it’s also important to note that neither did these large gambling and entertainment venues send businesses fleeing or send surrounding neighborhoods spiraling into some sort of urban dystopia, as gambling opponents ardently predicted.
However, Encore Boston, MGM Springfield and Plainridge Park, the smaller, $250 million slot parlor that kicked things off in 2015, have proven to be fairly effective generating tax income for state coffers, generating $78 million in taxes and fees over the past three months.
Scott Van Voorhis
Just don’t look too closely where the money is coming from, though. For its mainly from local gamblers, not the hordes of international high-rollers and free-spending out of state tourists that boosters had predicted, that are frequenting Encore Boston Harbor and MGM Springfield.
Turns out those dreams of a casino fueled economic development bonanza was nothing short of a fantasy.
But then again, so did all the prophesies of doom and gloom, including a warning by one former House speaker – ironically, not long before he was charged and then later jailed on corruption charges – of allowing “casino culture” to contaminate our state.
Heavens forbid. Well casino culture, whatever that his, has arrived. And at least when it comes to economic development, it’s proven to be real dud.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
